The Determinants of U.S. coffee import volumes from Uganda under the African growth and opportunity act, 2000 (AGOA): a disaggregated product level approach
Date
2020
Authors
Olila, Gabriel
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
Research on AGOA’s impact is largely scanty and findings are mixed. Most prior studies on AGOA have been carried out at a high degree of aggregation, estimating its effects on overall bilateral export flows, relying on variation by country and year that masks important differences across products. Born of a recommendation by the AGOA Response Office of Uganda, this study took a disaggregated product level approach to investigate the determinants of U.S. coffee import volumes from Uganda under the African Growth And Opportunity Act, 2000 (AGOA). Using an augmented gravity model, a random effects regression was performed on a disaggregated data panel of U.S. Coffee import volumes from Uganda that spanned the years 1994–2018 to establish; the main factors influencing the volume of U.S. coffee imports from Uganda and the effect of AGOA on U.S. coffee imports from Uganda. Artificial Neural Network (ANN) analysis was used to predict the future U.S. coffee imports from Uganda for the foreseeable future of AGOA, that is, till 2025. The main determinants of U.S. coffee imports from Uganda were found to be; air traffic, AGOA membership, U.S. openness to trade plus climatic factors like global CO2 emissions and the mean surface temperature in Uganda. AGOA had a negative effect on total U.S. coffee imports from Uganda, however, the variety of coffee products imported by the U.S. from Uganda seem to have increased post-AGOA. U.S. coffee imports from Uganda were predicted be somewhat erratic between 2019-2025 but trend upwards. This study recommends that; firms should enter into more sophisticated and specialty coffee products with AGOA-status and take special care of climatic factors; policy makers should accelerate market positioning, branding, productivity and value-chain enhancement policies for coffee; researchers should investigate the effect of climatic factors further towards developing climate resilient varieties of coffee plus explore the effects of AGOA on other commodities so as to better exploit the provisions of AGOA
Description
A Dissertation submitted in partial fulfillment of the requirement for Degree of Master of Science in Development Finance at Strathmore Business School
Keywords
Trade preference systems, AGOA, Coffee import determinants, Climatic effect, Uganda